Teched '07: STB Twitter report, Microsoft Virtualization and the Wal-Mart Strategy

After the STB analyst day, we were off to Bob Marley’s House at Universal studios. First, the fact that Bob Marley has been co-opted at a theme park is still blowing my mind. On the other hand, man was it fun! There were hand rolled cigars aplenty along with Red Stripes laying around. James, Neil M., and I even managed to get some RedMonkTV recorded, and I talked SOA and all sorts of IT management stuff in and out with Microsoft folks. So, good job for Ed Anderson and friends on that count.

Twitter Interlude! (Or, “crap, Jones, this service sells itself!”)

As ever, Twitter was an effect way to burst off a few notes here and there. I don’t think the Microsoft crew have discovered that content feed as, say, the Adobe folks have. So far, Adobe and some Sun Connection folks are tied for most respondent to Twitter. Back at Adobe’s analyst day I tweated something about LiveCycle and in minutes someone came up and started talking to me in response. Pretty jarring, but I’ve gotten used to people going from URL to meat-world at great speeds recently. Oren‘s group at Sun tie for response time, taking special honers for asking about the cat on a leash and fields of pumpkins. Special honors go to Lauren and Josh who seem to know to be up-to-date on your humble factotum.

The Wal-mart Strategy

Speaking of Twitter, this morning I wrote:

I think asking Microsoft to innovate in enterprise software and IT management is like asking Wal-mart & Target to innovate in style.

Which is one of those good Rorschach quotes: how people understand it will reveal how they think.

On the one hand, Wal-mart is sort of like, you know, not cool at all. Down in Austin my neighborhood flips it’s grits when Wal-mart wants to move in to a moribund mall. Target is cooler, but I always feel like it’s pretty much the same thing, just not as successful and, thus, not as much a bully and as much of as a Target.

On the other hand, Wal-mart is a mega-successful cash machine and, before his death, created the then wealthiest man in the world. Target’s cash-flow ain’t nothing to sniff at either. As I like to comment from my stratum of privilege, in a world where the rich get richer and smaller in population, and the poor get poorer and larger in population, selling to poor folks ain’t a bad business model. Everyone wants $2 tube socks.

More importantly, Wal-mart and Target are not what you’d call “market leaders” in innovating the products they sell. They’re in-house clothing brands, though tracking closely to The Cool, aren’t the leads that other fashion vendors are. Clearly, I have no idea what I’m talking about here at a deep level, but I know that it’s not Wal-mart and Target that are setting the fashion agenda.

They just figure out how to commoditize and sell the hell out of fashion.

And in part, that’s what Microsoft now does really well. They find IT problems that have a massive market, provide a volume-centric rather than perfect fit solution and strategy, and sell the hell out of it.

Of course there’s plenty of “innovation” that happens at Microsoft. That discusion isn’t the point. Microsoft typically are not the first to market for The Big Ideas in IT anymore (what large software company is?). Contemporary virtualization, of course, is a handy example.

Commodifying Virtualization

When it comes to virtualization, every Elder Company likes to sing a bar from that old song: “don’t call it a come back, I been here for years!”. This is fair, us snarky analysts like to throw rocks any chance we get, and the “nyah, nyah, VMWare out-innovated you!” one is an easy sling to make at the moment.

My sense of Microsoft’s virtualization strategy is that they’re pulling a Wal-mart/Target. Microsoft’s goal isn’t to sort of boil the ocean with their virtualization innovation. Rather, they see the obvious value and worth in it. Virtualization is a big, big part of all Windows Server strategy. But, it’s not a revolutionary whirl-wind. Instead, it’s just an assumed feature.

That is, in my way of putting it, Microsoft is seeking to rapidly commodify virtualization. The effect of that, of course, is to tank VMWare if (as VMWare is, indeed, equally rapidly trying to do) VMWare doesn’t expand their core into servicing rather than providing virtualization. The plan for Microsoft is: once virtualization is just part of the Windows, then why’s it such a big deal? You just have it and use it. No need to get all veins in the beck throbbing about it, just run your IT, bro.

Now, this strategy is a Rorschach test on it’s own. If you think being original and innovative is what counts, then it’s sort of a fizzle for you. But, if you’re focused on building revenue with software, innovative or not, it’s an interesting proposition. Now, sure, if you’re a competitor, you’re going to try to nuke Microsoft’s efforts. On it’s own though, its a reasonable approach.

Put another way, as I mentioned to several virtualization folks this morning during meetings, Microsoft’s virtualization approach is like putting fluoride in the water supply. Once the city drips it in, then it’s sort of not a big deal and there’s certainly no market for stand-alone flouride supplements, no matter how awesome they are.

Now, that’s just the strategy. It assumes that any given virtualization technology is as good as another, which is quite the assumption. If VMWare, Xen, or whoever actually turns out to be better and Microsoft’s virtualization is less than “OK,” then the Wal-mart strategy will fall on it’s face for Microsoft. It’ll be Mom Jeans all around.

Disclaimer: Microsoft is a client and paid for travel and expenses to TechEd. Sun, IBM, Adobe, and a client of Lauren and Josh are clients of RedMonk.

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